NewsWatch: 12-01-98

CBS.MarketWatch.com

NEW YORK (CBS.MW) -- Potent buying in bedrock technology names allowed the U.S. stock market to put Monday's dreary session behind it, as Internet shares scampered back into investors' good graces in heavy Tuesday dealings. The Dow Jones Industrial Average
DJIA, +0.35%
advanced 17.51 points, or 0.2 percent, to 9,134.06. It fell as much as 128.73 points in the early going before players dove back into marquee-name computer shares, spurring buying in other segments. "You had the market down in the morning and then Cisco, Microsoft, Intel, WorldCom, and Dell turned positive," said Scott Bleier, chief investment strategist at Prime Charter Ltd. "There's the big CS First Boston technology conference going on in Arizona, and those conferences are usually lovefests. And that's what I think took the market back up."

SEATTLE (CBS.MW) -- Boeing, the world's largest aerospace company, said it will lay off up to 48,000 workers as the Asian economic crisis cuts into its revenue over the next two years. Boeing (BA)
BA, +3.77%
, whose stock is a component of the Dow Jones Industrial Average, said it will reduce production of 747 airplanes to 2 planes per month from 3.5 planes per month in late 1999. Production of the jetliners will fall to one a month in 2000 if economic problems persist, the company said in a statement. In addition, Boeing said it will lay off as many as 38,000 employees in 1999 and another 10,000 in 2000.

IRVING, Texas (CBS.MW) -- Exxon Corp. agreed to acquire Mobil Corp. in a blockbuster $77 billion deal, creating the world's largest energy company and fortifying the new entity against a steep decline in oil prices, which has wreaked havoc on the petroleum industry. "This is the deal of the century," said Fadel Gheit, a longtime oil analyst at Fahnestock & Co. "It's positive, positive, positive. "Under the deal, each share of Mobil will be converted into 1.32015 shares of Exxon. The deal values Mobil shares at about $99 each. Exxon shareholders will own 70 percent of the combined company.

NEW YORK (CBS.MW) --Internet stocks
$gin
reversed course dramatically, propping up , amid another round of e-commerce agreements. "Mergers-and-acquisitions and venture activity is helping Internet stocks and the market as a whole," said Robert Robbins, market strategist at Robinson-Humphrey. "My feeling is that it will contribute to better-than-expected earnings next year," he said. Other investors seemed to share that view, as they piled back into Web stocks, seizing an opportunity to buy.

WASHINGTON (CBS.MW) -- The manufacturing sector is still sick, but the overall economy is healthy, according to three economic reports. The most widely watched report, the index of the National Association of Purchasing Management, showed continued distress in the manufacturing sector, falling to 46.8 percent from 48.3 percent in October. Production, new orders, employment, prices, imports and exports all declined. The index has fallen for six months in a row. A reading of over 50 percent indicates a growing manufacturing sector.

LONDON (CBS.MW) -- Europe's markets plunged on the back of Monday's 2.3 percent slide on Wall Street and worries that interest rate cuts may not in fact be forthcoming in Europe. In London, the FTSE 100 index closed down 3.6% or 206.4 points at 5,537.5. In Germany, Frankfurt's Xetra DAX index closed down 4.95 percent, or 248.96 points at 4,777.18, while the Paris CAC 40 was down 4 percent or 155.04 points at 3,688.34. Europe was also rattled by a sharp decline in Hong Kong's Hang Seng index, which plunged 4.10 percent or 426.47 points to 9,975.85. In Japan, meanwhile, the Nikkei 225 index closed down 48.29 points at 14,835.41.

HAUPPAUGE, N.Y. (CBS.MW) -- Twinlab shareholders might need some St. John's Wort to alleviate the depression that comes from having a stake in this maker of herbal medicine/nutritional supplements. Twinlab (TWLB)
twlb
warned that growth for the fourth quarter and 1999 will be about one-third the level it has recorded so far in 1998. A pair of investment banks cut their outlooks on the company.

MOSCOW (CBS.MW) -- Russian tax authorities have dropped all criminal charges against senior executives of the Moscow offices of Johnson & Johnson (JNJ)
JNJ, +0.99%
after the U.S. pharmaceutical giant paid off millions of dollars in taxes and fines, officials said. The Moscow tax police in July filed criminal charges against Johnson & Johnson's former Russia director John Bailey, former financial director Kevin Kohut and former chief accountant Wayne Blanchard, holding the three U.S. citizens responsible for what the government said were unpaid taxes.

STRASBOURG (CBS.MW) -- Germany's Hoechst and France's Rhone-Poulenc confirmed that they're creating a "merger of equals" with their life sciences groups. The new company will be called Aventis. The two pharmaceuticals giants will become a world leader in pharmaceuticals and agricultural businesses, with combined sales of $20 billion. That would make it the second biggest pharma company in the world, as measured in sales -- second only to Merck & Co. Inc. Aventis will comprise the pharmaceutical and agricultural businesses of both groups and will be incorporated in France, with global headquarters in Strasbourg.

LONDON (CBS.MW) -- Total SA, the French oil and gas giant, said that it has purchased a 41 percent stake in Belgium's PetroFina, and said it will bid for the rest of the company for $12.7 billion in stock. The merged company would create the sixth largest oil company in the world and the third largest in Europe. Total will issue new shares and exchange nine Total shares for every two Petrofina shares. The offer values Petrofina shares at 19,482 Belgium francs ($557 million). That represents a 36 percent premium to Friday's closing price and a 50 percent premium from a week ago.

SAN FRANCISCO (CBS.MW) -- One of the early investors in Didax, the evangelical Web site whose stock is flirting with heavenly levels, has another tiny company whose shares might be ready for a ride. Kyle Krueger, president of Apollo Capital Corp., saw shares of Didax (AMEN)
AMEN, -11.23%
explode this past week after investors hankered for U.S. Internet companies of all types and sizes. Didax (market cap $60 million) created www.crosswalk.com, a Christian Web site.

SAN FRANCISCO (CBS.MW) -- So where are global stock markets headed? The chief economist of the world's second-largest bank, Klaus Wellershoff of the United Bank of Switzerland, has the answer. He sees the market in the shape of a "W." After hitting an all-time high earlier this year, the fear of a global financial crisis led to the first leg down in that W, from 9300 down to the 7600 level on the Dow. The cause was the fear that the Asian and Russian financial crises would lead to a worldwide recession.This fall, we've seen the bounce back up to the old highs.

LOS ANGELES (CBS.MW) -- Next year, Congress will consider privatizing America's Social Security System.Wall Street is quietly lobbying for that move. If the system is, in fact, destined for bankruptcy in the near future and a taxpayer can make a higher return on Wall Street, let's invest in the future of corporate America rather than big government.

SAN FRANCISCO (CBS.MW) -- The idea is simple enough. Investors looking to get in on a hot initial public offering go through the backdoor by buying shares of an already public firm that owns or has a significant stake in the soon-to-be-public company. In the past couple of weeks we've seen several examples of this phenomenon, most notably with Creative Computers (MALL)
mall
, which plans on spinning off its uBID auction unit this week.

NEW YORK (CBS.MW) -- At the count of three, I want each of you to raise your hand, reach up, and pat yourself on the back. You deserve it! Yes, congratulations are in order, for at the close of business Monday, the U.S. economy will have tied the record for longevity of a peacetime business expansion: 92 months. That was set back in the 1980s, when the economy grew nonstop from December 1982 until July 1990.

LOS ANGELES (CBS.MW) -- Last week's column presented a decision process on refinancing: comparing the fixed-rate on your mortgage to that currently available on a no-points, no fees fixed-rate 30-year mortgage tells you whether or not to refinance. The choice of which mortgage to choose when you refinance, however, depends on your views as to the near-term future course of interest rates. This process is simple, but it leaves a few loose ends.

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